战略会计英文论文

战略会计英文论文 Abstract The strategic management accounting (or SMA for short) is based on the theory on strategic management of enterprise. It can effectively serve the new areas of business strategy by means of management accounting and using the information of accountancy. This article will analyze the present situation of Jessup with the knowledge of strategic management accounting. Now the company has developed to a certain stage, but they need better management of accountancy to enable to company to develop better and faster without unnecessary obstacles. The first part of the article will predict the economic outlook of Jessup, provide information about management, talk about the participation in making decision on economy and the development of business objectives. Next is how to control the company’s economy and evaluate the performance effectively. The second part focuses on the use of the cost in strategic management accounting. Jessup mainly engages in advertising and public relations. In order to make profit, the company should have a wise investment of their money. They have to effectively manage their cost and revenue. I will present a detailed analysis of one case to explain associated costs and unassociated cost in relation to benefits. The third part is aimed at analysis on the activity-based costing role and potential problems. At present more and more large companies use the method of activity-based costing role to manage their companies because this method can help the companies to benefit from the cost control and avoid some potential problems. In the end I will give some suggestions and comments on strategic management accounting. The first question Jessup is a company mainly engaged in advertising and public relations organization. With the development of the company, it has a higher demand for management of the accounting functions, because the current management system has not suited to the company. We must strengthen the management for the development of the enterprise. We may use limited resources to provide significant economic benefits. At this stage, the company needs better control over the information on cost and decision so as to make scientific planning for the future, allowing companies to achieve better development. First, I will use the methods of strategic management accounting to analyze the present situation of the company. The main objective is to collect business-related information to prepare for the next prediction, decision-making, planning, control and other work. The work is also the main task of strategic management accounting. Strategic management accounting has played a key role in the budget of the economic outlook. On basis of overall goal in business and management principles and considering the functions of the economic law under the constraints in the operating conditions. It will choose the most reasonable and most appropriate mode to make the budge to predict the company’s future costs, revenue and even changes in trends in enterprise funds and to help Jessup company to make business decisions. If the company’s managers 1 have made the right decision, it can be conducive to enhancing the economic benefits. The prediction of the company’s outlook includes sales, cost, revenue and capital forecasts. Projections of capital are particularly important. If there is something wrong with the forecast of capital , the company is likely to stop or even bankrupt. If a company does not have a sound financial operation of the program, it will encounter a great risk. In this respect, strategic management accounting can play the role of forecasting total capital funds, the additional demand as well as the growth trends. It can help the company better understand the financial matter to ensure adequate funding of enterprises and make the company to run on. The second important function of strategic management accounting is the decision-making functions. Decision-making is aimed at a specific problem and determine the most reasonable and most effective solution. which focuses on enterprise management. Enterprises usually confront a lot of problems that may arise in the business, and any problem generally has several different solutions. But in fact the enterprise can choose only one solution to the problem, which should maximize the economic benefits. How to make decisions before action is the critical. Strategic management accounting can play a part in economic decision-making functions, which can be realized by collecting and collating the relevant information, selecting the method of scientific evaluation to determine standards of evaluating various decision, making the right financial evaluation, and ultimately identifying the most excellent action. Jessup company has predicted the condition in sales, costs, revenues and funds, and collected the information and data related to a variety of decision-making. It has to control and manage this series of activities. Control is the economic activities of enterprises for monitoring and adjustment according to plan. At the time of making decision the company should pay attention to the cost impact on the Jessup, so we have to make strategic cost management. First, It’s life-cycle cost management. A company can be divided into several stages of development, growth, maturity and decline. At different stages, companies will face different opportunities and challenges. Life cycle cost management can guide the strategic cost management of the company to ensure that companies can long-term development. Next is the management of quality cost. Quality costs are those related to the innovation, identification; repairs and costs to prevent defective products. These costs can be divided into three categories: prevention cost, assessment cost and defect cost. Cost of quality management can help the organization better use resources and reduce the company’s losses caused by problems in quality. Target cost is the cost to ensure the realization of the target profit when various kinds of goals have been set up. The target cost management can promote the enterprises to strengthen cost accounting, better implement economic responsibility, encourage all employees to work actively, and further decline the cost in a significant way. During the series of activities, Jessup should supervise the 2 implementation of the plan to make sure that the economic activities can move on as expected and lay solid function for achieving the goal. On the other hand, Jessup company needs the feedback of quality from their own actions they have taken to determine the impact of the plans on the future. In order to achieve control functions, Jessup company should establish a complete control system to ensure that the control system can provide information related to economic activities, to ensure that the control system can effectively adjust the planning and the action of management personnel in time. The last step is the evaluation and management of Jessup company performance. Evaluation and management of performance is a process conducted subsequently compare and analyze the actual results with the expected results and sum up the whole actual work. Jessup company may determine the responsibility of various departments and give them the corresponding rights. At the same time they must be obliged to comply with situation assessment to ensure the effective use of limited resources. The other role of evaluation and management of the company’s performance is to appraise the performance of employees so their work can receive a fair evaluation. The company not only points out the existing problems, but also give the corresponding incentives according to the performance, which can motivate employees to achieve company’s goals, thereby enhancing work efficiency. After evaluating the performance of the company and its management people can evaluate Jessup Company’s competitive position, which can guarantee Jessup’s the long-term competitiveness in the advertising and public relations industry The role of strategic management accounting is a great help to Jessup. The analysis of value chain can help Jessup company understand their competitive position; understand the costs of competitors, the market share and assess their advantage and disadvantage, because the strategic management accounting can use a variety of methods for the collection, processing, collation, and analysis of information related to business strategy to help managers develop Jessup’s strategic goals and planning. Using the knowledge of strategic management accounting can also analyze customer profitability. Customers are external resources essential to an enterprise, which can bring economic benefits for the enterprise. If the profitability of the customer can be reflected, it not only enables companies to obtain more comprehensive information on accounting and helps managers make the right decision, help the customers to create the value for enterprise to enhance its competitiveness. These activities can help the company achieve better development , enabling the company to have a clearer future business objectives, and in the course of operations to budget, control costs, create value for customers, and ultimately to maximize enterprise value target. 3 The second question Cost just refers to all kinds of costs for the production of products and service offered by the enterprise. Strictly speaking, the cost can be understood as the cost of capital in a production and business activities or the currency of consumption . Consumption of money usually involves the following issues: First, who spent the money? Second, what kind of business activities the money is spent on? Third, what purposes the money spent on?. Fourth, what economic relationship of the currency is there in consumption of currency? If you have different answers to these questions, you will have some information about the concept of cost, including related costs and irrelevant costs. Cost in the management of enterprise has a very important role; the amount of cost is an important factor for the enterprise to consider. First, the cost can let us know profits. Enterprises in the business process will produce income, For example, I sold 10 washing machines, the price of each is 300 pounds, then I won ? 3000. But the cost of production of washing machines needs to be included. If the cost of washing machine is 200 pounds \ set, my profit is only 1,000 pounds. Second, the costs can determine the pricing of products. In the development of product prices, we must consider the actual capacity of the enterprise. If the cost of a washing machine is 200 pounds, if I only sell it at the price of 250 pounds, it is possible I will lose, because I still need to rent warehouse and transportation cost. But if I sell it at 300 pounds, then I will make a profit. Third, the cost is an important basis for sound decision-making of the enterprise. The amount of the cost will affect the capacity of the cash flow and other issues, which will directly affect the company’s business direction, scale and other major decisions. Fourth, the costs will affect the results of operation. The lower the cost of business is, the better the operating results are. Now I will use an example to analyze relevant and irrelevant costs in detail. Case I If I want to set up a company to produce washing machines, I need a series of activities. First, to recruit staff to establish a team, I will recruit eight project managers, 50 staff members, or administrators. The salary of managers is 3000 pounds \ month, the salaries for staff is 1,500 pounds \ month. The cost of leasing plant is 20,000 pounds \ year. Next is the purchase of equipment. A large equipment is expected to spend10,000 pounds, small appliances are 6,000 pounds \ sets. One part of the washing machine parts can be produced on their own. The other part will need to purchase. The materials for our own production have to spend ? 40,000 \ month. The materials of procurement need ? 60,000 \ month. Our factory manufacturing costs ? 80,000 / month. The costs needed to produce washing machines are as follows. I will use a chart for details. 4 We can see from the chart, the actual cost is lower than budgeted cost, where possible causes include the floating market price of materials, personnel changes, the increase in production capacity in the manufacturing process , and the reduction of the corresponding cost. In short our budget should be sufficient. If the budget is not sufficient, there may arise corporate liquidity problems, which will bring a lot of harm. We assume that the factory can produce 1,400 washing machines a month; we estimate the cost per washer is ? 199.28 for each. The actual cost is 187.14 pounds . Next we will set prices. The standard of pricing is based on the cost and profits on the one hand, and on the other hand it is related to competition. If we set the price of washing machine 240 pounds \ set, then our revenues will be small, because we have to consider the plant construction costs and transport costs. If we set at 350 pounds \ set, our products will lose competitiveness, as the price of other brands of washing machines are lower than ours. Next, I will continue to use the example to analyze the relevant and irrelevant costs and revenues . Relevant cost is a cost associated with the decision, because the different decision alternatives, the costs incurred will be different. The cost is mainly related to future cost or the special cost needed to be considered in the decision-making process. So the relevant cost is closely related to corporate decision-making . In the first case it involves the opportunity relevant cost, cost difference and the costs of replacement. First I will introduce the opportunity cost. Opportunity cost means when we are making decisions, we have to give up some opportunities for other costs in order to get an interest . According to Case I, I have ? 10,000 to buy a machine, machine A can produce 1,200 parts per month, machine B can produce 1,300 parts per month, but eventually I chose machine A and gave up machine B. then the 1300 part f is the opportunity cost. Next is the cost difference. It refers to the difference of the expected cost between the two programs. The cost of decision making, due to the cost of each program is expected to happen is different from the cost difference is generated. Differential cost is an important basis for decision-making costs. In Case I, we can choose to produce washing machine parts by ourselves, or we can also choose to buy. If we produce a part 5 at the cost of 10 pounds, and the cost of buying the same part is 12 pound, then the difference between their costs is 2 pounds. The last one is the replacement cost. Replacement cost refers to the cost spent by the company to re-purchase the same equipment or to re-create the same product . Replacement cost is the opposite to historical cost. According to Case I, the cost of producing a washing machine is 187.14 pounds now, but after 3 years, the cost required to produce the same washing machine is 200 pounds. That is the replacement cost of ? 200. Replacement cost is affected mainly due to the effects of inflation. It is very important for the enterprise to manage the relevant cost in the business process, because it has a direct impact on the decision made by a corporate. An effective control of costs can help to maximize the profits of enterprises. Next I will introduce irrelevant costs. Irrelevant cost has nothing to do with the decision-making. Irrelevant cost includes two aspects: First, it refers to the cost which has already occurred in the past but not affect making decisions in the future, such as sunk costs. The second is the inevitable cost that would certainly produce, but not have an impact on corporate decision-making. Historical cost belongs to sunk cost, which is not controllable cost in terms of the existing decision-making, and will not affect current or future decision-making behavior. In this sense, the sunk cost investment decisions should be excluded from the interference. When we are in the production of washing machines, there may be something wrong with some products in the production process, resulting in the uselessness of some washing machines . But in the process of production has resulted in cost, this cost is called sunk costs. Irrelevant cost also includes some unavoidable costs, such as the cost incurred in leasing plant, machinery depreciation, fees of water and electricity and staff wages, which are the inevitable cost of business, but these costs have no effect on business decision-making, so they are irrelevant cost. THE THIRD QUESTION Consumption of an organization comes from all resources. It is the source of the cost. Activities of an organization refer to the consumption of resources for the specific purposes in the project. When these activities are increasing, we need a way to manage it. This method is the activity- based costing. In the use of activity based costing, all activities can be reflected, such as performance evaluation and resource utilization. Activity based costing is an activity-based management system of information. It centers around activities, which start starting from product design to the material supply. From all aspects of process, such as assembly and quality inspection to the whole process of shipping and selling through the calculation of the cost of activities and events, we can ultimately calculate a more accurate coat of product. At the same time, we 6 should track all the activities associated with the product, to eliminate valueless activities, optimize the activity chain and value chain to increase value. The company should provide useful information, promote maximum savings, and improve the capability of making decision, planning and controlling to ultimately enhance their competitiveness and profitability. A number of motives associated with activity based costing includes cost drivers, resources motivation, activity motivation, and cost objects. The factors leading to cost is what we call cost drivers. Resources motivation is the allocation of resources based on consumption of resources. Activity motivation is based on consuming activities of cost -distributing objects. The cost object refers to the person to whom the cost is assigned, referring to the customer or a product. The following chart shows the relationship between them. When Jessup has developed to a certain stage, Jessup need use more knowledge about strategic management accounting to analyze the company. especially issues on the cost and decision-making .Since the use of activity based costing can make good use of the cost to improve the management and decision-making, it brings many benefits for the Jessup. First, it helps to improve the quality of cost information. While controlling the cost, the first thing to do is to collect cost-related information. The use of activity based costing can analyze and filter the information so that the information can create more value for enterprises. Second, it benefits to the company’s management activity cost in the production system, because activity based costing can provide information on the activities, which will benefit the company to control costs. And third, to improve the management of corporate responsibility cost, establishing a kind of activity-based responsibility accounting system. Fourth, we can enhance the competitiveness of the company Jessup. Because activity 7 based costing can help us know more about the accurate cost of business, and thereby improve the forecasting and decision-making and to enable enterprises to maximize profits. But when we use activity-based costing, we will also have some problems. Because activity based costing is a very complex process that requires a good skill to use it, and takes a lot of time. Therefore, whether the company uses activity based costing depends on the cost in the process of production and other professional and technical level of management accountants. Here I will summarize these issues. First, the cost information offered by activity based costing is based on the historical cost, so lacks strategic relevance to future decision-making. Second, the use of activity based costing management will increase the computing procedures, increase the workload, and raise the cost of information. So activity based costing is rarely used in some smaller businesses. Third, the choice of cost drivers would be more difficult and uncertain, such as advertising costs, external audit fees. Each method of cost analysis has its own characteristics, we can only find suitable methods to analyze the cost, so as to meet the business’s real interests, and ultimately achieve business goals. Strategic management accounting is closely related to strategic management. Strategic management accounting uses a variety of methods to collect, process, organize various information related to strategic management, and based on the management of this information. It can help companies develop strategic goals, strategic planning and evaluation of management performance. These activities gives a great help to the company. In my opinion, we should pay more attention to the following two points: First, collection of information is the premise of all activities. We should continuously improve the quality of the management of information, so that we can make the right decisions and have accurate cost control. The second is to analyze the competitiveness of enterprise, which is called SWOT analysis. We should be aware of our own advantages and threats and seize opportunities to create more value. Strategic management accounting is a very practical subject. It can help enterprises get out of difficulties and to enable enterprises to achieve better development to create more value for the enterprise. 8